Category Archives: Music

Anyway, unofficial title – Mid Month Post: Masterminds Continued, Plus Customer Development Goodies. Not as good a title. Right?

Thought a blog post was in order, because I’m starting to describe my business and “adventures” to random strangers and in emails to my parents again, so it’s probably time to open the valves and let some steam off.

“What’s new this week Nate?”

Customer Development, that’s what. CD is the most sexy thing with the least sexy name ever. It sounds like the job your uncle Bart has in Sioux City, in his fake-wood-paneled office with a stuffed 50-inch steelhead he didn’t catch mounted on the wall. It’s actually the most essential part of business. Strip away everything else, and that’s what’s left – finding a need, and filling it.

Last summer if you’d asked me I would have said Dane Maxwell invented CD. Nope. He just productized it (“productized” – a buzzword I promise the demise of immediately after this post). But crediting Dane Maxwell with inventing CD – even in the E-business entrepreneur space – is like crediting Mike Bloomberg for the East River.

Alright already what’s customer development?!

It’s just talking to people about what problems they have. That’s it.

In my niche that consisted of calling customers who bought my video series and peppering them with questions, all with the goal of identifying the Venn diagram of a problem painful enough to pay a premium price to resolve, and one that I have the means to resolve.

Basically I, who have been selling my product for $20, and who vowed to think bigger than minutely reoptimizing my pay-per-click campaign, was wondering, “what’s a problem you’d pay me $300 to resolve, and be happy to do it?” Or, put another way, “what would the $300 incarnation of my product look like?”

So far I’ve talked to two people, both super cool, both with an infectious enthusiasm for the drums, and learned some things I expected to hear, and other things that took me by surprise. For instance –

Was production value a deterrent to buy, or an inconvenience once you bought? No.

How did you discover me? Googling the other Nate Smith [for readers of this blog not familiar with jazz I have the same name as a much more famous drummer] and found your videos on Youtube instead.

I owe Nate a round.

When we got into “pain points” there were two main things – hassle resolution and personalized feedback. The first should come as no surprise. Just look at the rise of “done for you” services for things we really don’t want to do ourselves. Travel booking. Financial planning. So the value-add is instead of someone taking my videos and specing out (ok I swear that’s a word) their own practice regimen for the next six months, it turns out a few hundred for someone to just do that for them is a pittance.

The second, the personalized feedback, is also not surprising. What do you get in a private lesson that you can’t from a video? A two-way conversation with an expert, in which that person looks at you and makes personalized recommendations. Luckily, that’s pretty easy to scale, if users submit periodic videos to me, which I can batch into an afternoon. Here, as before, the fact that I love talking about the drums with other motivated drummers doesn’t hurt.

Just as an aside, what this is turning into is changing my mind about teaching, to a degree. Between the drummers whom I’ve chatted with to get their feedback and those who have sought me out for lessons, this is not “drum teaching” as I did it before. For starters, this is motivated, advanced students good enough to push me to get better. What’s more, this time I’m doing it on my own terms, not, to reprise a phrase I had the poor judgment to put in an email, “slaving away in-person teaching unmotivated elementary students in a storefront music school between a happy-ending massage parlor and a Beard Papa.”

So this is the fun part. The next stage will be the execution, and as any entrepreneur will tell you, “good ideas don’t matter. I’d rather a bad idea with good execution than the reverse.” Execution will look like 1) actually designing this “uber course”, with continued help from customers, and 2) pre-selling it to them. Don’t know how much I mentioned about conversion funnels in the last post, but I’m also planning to continue to use PPC in a small way to send people to the “event horizon” of my conversion funnel (a buzzword I don’t hate, not least because of the visuals it conjures up). A funnel which will consist of an email opt-in, then a series of auto-responders sending subscribers 3-4 premium videos in their own “mini-course”, followed by a soft sales pitch (“if you like these and want to go deeper, hook up the course”).

Hmmm okay quickly what else is new? Continuing to enjoy the paid entrepreneurs’ social network. Chatted with another newbie this morning in what I thought was a helpful exchange. The endgame is still to get into a “mastermind” (AA for entrepreneurs), or which the process is slower. With the mastermind piece, the pricetag is waaaay worth it. Without it…more of a tossup.

Also doing some hustling for copywriting gigs, offering – as I have in the past – to do work for free for some of the people I admire in the podcast sphere. Definitely no endgame there. Kind of the “go big or go home” mentality – either one of these people I really respect and look up to likes my copy and something comes of it – or doesn’t – or they don’t.

Last thing – elaboration on “go big or go home”. I’m really bullish on this lately, and one insight was this guy who charged me $15 an hour to rent his practice studio. (Need 4g signal for skype lessons….long story.) He has to meet me in person to let me in. After the second or third rude text asking “are you in or not” while I waited for my student to respond, I decided how I would be different from this fellow. Instead of doing things I don’t want to do and charging extremely low rates for it, I want to do primarily things I do want to do (including things that require struggle and discipline in the short term), give most everything away for free, and go for the big paydays.

Like I’m Gordon Gecko or something. Sheesh. Let’s clear a grand profit in an entire month before I start talking grandiosely. But gotta enjoy the small successes along the way.

So I’m actually feeling pretty good about online business and my businesses. After the last post wondering whether to go deep or go broad, I’m happy I decided to follow Pat Flynn’s advice and double down. I doubled my ad spending and lowered my prices somewhat, and…good results so far.

Let’s Get to The Earnings

First, the hilarious news.

Niche Sites – Smart Getaways for Couples – $0.34

That’s right. Adsense on Smart Getaways for Couples made me 34 cents last month. Page views are decent, but I need to go big with this site and find another way to monetize, because the Adsense…not so happening.

Now, some good stuff.

The 80/20 Drummer – $290.88

That’s $240.88 from online sales, and $50 for a private coaching session.

Gross Revenue – $291.22

Of course, I’m spending money for ads and site hosting.

Site Hosting – Bluehost – $9.99/year/12 = $0.83

Site Hosting – Squarespace – $10

Facebook Ads – $114.69

Total Expenses – $125.52

Total Profit – $165.70

Still a pretty modest number. Let’s look for a second at conversion rates though. Site hosting is fixed. For every dollar I spent on ads, I earned $2.53 back. Assuming that rate held, if I increased my ad spending fivefold ($573 give-or-take), could I expect a fivefold return on investment? ($1450, with $877 in profit.) There are, of course, limiting factors.

The sample size is still too small to make statistically significant predictions about the conversion rate. It may still be that I “got lucky”.

Ultimately the size of the market may also be a limiting factor. If there are 20,000 existing drummers in the universe who might have an interest in my product, and the market self-renews at 100/month, that means at the present conversion rate there’s a definite point of diminishing returns, at which everybody who would have bought under present conditions has bought, and the low replenishment rate means slower sales.

It’s almost so theoretical as to be a waste of time to think about. Luckily, I can test, by increasing my ad exposure and budget incrementally and seeing if the conversion rate holds.

The other side, of course, is increasing the conversion rate. How many people saw the ads, clicked through, and decided “meh, I’m gonna wait”? If I use myself as a case study and my propensity to see what the gist of a new product or service is, then ruminate for a while before I purchase is representative of anybody else’s tendency, there are a least a few folks like that out there.

And here’s how I’m addressing that. Social proof. I’m making a documentary series about my attempts to tackle different drumming challenges, based loosely on Survivorman, except instead of “I’m in the outback with only the clothes on my back. Can I make it?” It’s “I’ve got just three days to learn this or that demanding tune of prepare for an audition.” But pretty much the same in all other respects. (Read: Real Tigers.) For now, I’m doing the Gary Veynerchuk model somewhat backwards – build the product first, then the audience second.

Anyway, I put mailing list opt-ins all over the site, and the good news is I’ve been getting a lot of sign-ups. I know I’ll soon have 1000 facebook “likes”, and my goal is to get my mailing list to 200. These are the folks who will get the “reality show” in their inbox every week. Not for nothing, a funny psychological thing happened – I’m almost as happy to see a mailing list signup as a sale.

The ancillary effect will be lots of videos on Youtube, which to-date has been my highest converter. (People who found my videos while browsing on youtube were most likely to buy my products.)

It’s all a grand experiment. Maybe the videos won’t work, or won’t work well. As long as I’m able to shift and adapt my strategy while maintaining focus on the larger goal, I’ll be okay. As someone once said, “you only loose when you quit,” and as I like to add, “as long as you’re receptive to what works and what doesn’t.”

So let me set a somewhat quixotic goal. I want to do $1000 in sales in the month of March. No idea if I’ll reach that or not, or how, but I’m putting it out there. Better ads, better on-site conversion architecture, more free videos, more mailing list subscribers. Let’s see if we can get there.

This is JP Bouvet, a young drum star who took full advantage of his success to start an online platform sharing lessons and advice. He’s a hero (by his own definition) of mine because he already uses his platform to do good and spread knowledge. Each generation has its own archetype, and I grow bored with discussions about whether we, as humans, are getting “better” or “worse” – I think everybody’s a product of our context, and some of you have heard me discuss my idea that the defining features of my generation are the lack of a recent “draft” war (a war we feared having to serve in) and the evaporation of the compact between employer and employee that defined the Eisenhower era. Anyway, JP’s Already figured it out, and is rocking it. Love your opinions.

First, a word of caution. As before, I have to entreat Breaking Ferriss readers notto visit the 80/20 Drummer site during this period, because one false “visit” could upset my metrics. Thanks!

Well I’m stymied.

After receiving 4 “pre orders” in 4 days for the 80/20 Drummer, I decided that to continue “dry testing” (that’s advertising a hypothetical product and seeing what percentage of visitors to your site click “buy now” to gauge how sales you’d have before investing in a product) without adding the last parameter – crowd funding – would be a waste of money.

Using the server logs, I was able to determine where each visitor who clicked “pre order now” came from, and it was a surprise. Facebook ads? Google adwords? Nope. Two of the four came from Youtube, one from Craigslist (which means he/she was interested in in-person lessons, but decided to order the videos instead), and the fourth from google – not from paid advertising but from a natural search. There are two sides to that coin. The good news is that I’m getting free traffic to my site that’s converting (going from “visitor” to “customer”) really well, which means I may be able to save on advertising. The downside is, unlike paid advertising, I can’t control the volume of traffic (by, for instance, doubling my ad budget for twice as many visitors on Adwords).

Still, I needed to “jump in” to crowd-funding, and I conquered my initial fears of asking people to crowd-fund the 80/20 Drummer by putting myself in the shoes of a Breaking Ferriss reader. “What’s the minimum effective dose?”

Obviously, campaigns on Indiegogo and Fund Anything are 60 days in length. At the pace of one “order” per day, I could almost make my goal in 60 days, but first I need to test if a visitor learning “pre order” means crowd-fund changes conversion rates at all. My fear is someone will see “crowd fund” and be like “waaaaaaait a minute – your video isn’t even made yet?” As usual, I’m doing two things. First, I’m being completely transparent.

Here’s the crowd-fund landing page.

The page explains that when potential customers click to continue, they’re going to be redirected to a third-party funding site. I felt that would be less jarring than linking directly to Indiegogo from the “buy now” button on the main page. Personally, I’d far rather somebody leveled with me, and I the only site I can create as a “first draft” (before I market test it) is the one that would be most likely to make me buy.

Crowd funding typically sets a funding goal (mine will be $2000) and awards “premiums” to people who “donate”. As the text explains, my “premium” will simply be a steeply discounted copy of the 80/20 Drummer. As such, it’s more strictly a “pre order” than it’s a donation, since the buyer will receive the product he purchased – at a discount – he just has to wait a few months.

If you’re thinking “wait – how do you know somebody will pay $80 for the completed product?” you’re thinking the right thing. I plan to do an actual price-test soon. The price range for drum DVDs is all over the map, and many done for pure entertainment purposes actually sell for around $30 all-in. The 80/20 Drummer is different in two ways – first, it’s longer – more like five actual private lessons chocked full of material somebody could continue to work on for years (I know because I’m still working on it), and second, it includes an e-book with transcriptions of the exercises. Heh heh I feel like I’m writing copy for the site…

To return to my Macro-Point, above I said “I’m doing two things, first…”

So here’s the second thing I’m doing. Dry-testing how “crowd source” affects the conversions. Will 100% of visitors who clicked “pre order” click “continue” after learning they’re going to Indiegogo to crowd fund the project? Probably not. I suspect that after a couple of days I’ll have a pretty good picture of the “falloff”. If it’s 75% that continues to crowd fund me, that’s pretty good, and I’ll be reasonably confident launching a real campaign. If it’s lower, like 25%, or – horrors – 0%, I might have to take a different approach.

Remember, crowd-funding is just one idea I’m playing with. Another is the much simpler Tim Ferriss model of simply confirming the demand, investing up-front in video production, and making my money back with actual orders (at the highest price point, not at $29.99). We’ll get further into that, and why if you’ve got some liquidity the tax laws make such a minimal investment pretty “win win”, if crowd-funding turns out not to be viable.

Monday morning, and good news. According to my stats page on Squarespace, I’ve had three clicks on the page called “pre order” in the last 3 days. That’s a page you only reach if you click “buy now for $29.99”. I’m beyond psyched, especially after wondering if the method of using paid advertising was even viable. I now need to figure out for-sure where the traffic is coming from (I have a pretty good idea), see if it scales (for instance if I spend 10x on advertising if I’ll get 10 clicks-per-day instead of 1), and do it.

To review, my hairbrained idea was to use the crowd-funding model to fund the production of the 80/20 Drummer – being completely transparent to the buyers, telling them that by “pre-ordering” they’re getting a sharp savings on the eventual price – to the tune of about $1500 (the estimated production costs), which would require 69 pre-orders at $29.99 and a bit extra to cover the advertising retrospectively. I plan to use a crowd-funding site like Indiegogo or FundAnything, to side-step any legal issues involved with accepting credit card payments personally. Again, the idea being that any musician can duplicate my “success” with zero investment up-front.

Here’s how the numbers look. 74 views in the last 3 days and 3 “buys” is a conversion rate of about 4.05%, which is actually excellent. I suspect that’s going to tick up, because my suspicion is most all of the traffic is coming from Google Adwords. (Facebook advertising, it turns out, is great for getting page “likes”, and traffic perusing your site, but not great for conversions. Who’s ready to buy a drum DVD? Somebody who’s googled “drum lessons”.) At any rate, my Adwords budget is currently $5-a-day, so that’s $24.99 hypothetical profit-per-customer. What will happen if I up my ad budget to $50? We’ll see.

Well, after some rumination, I checked my conversion stats for the 8020 drummer.

(For larger context, read this post.)

I’d been getting anecdotal evidence of a positive response from facebook – many new page “likes”, a ton of them from South Korea and Taiwan, which I included on a whim after traveling there and getting a gut feeling jazz was about to “blow up”. So I held my breath, and opened the stats page on Squarespace (which, as I’ve discovered, does most of the work Google analytics and Crazy Egg used to do in a single click, especially if you set up your site architecture strategically).

There’s reason to be optimistic. 8 people watched the preview video on the front page and clicked a button that says “learn more and pre order”. It’s true that none of those clicked through to the sales page, once the price was disclosed. Still, for $2.50-a-day advertising in Facebook, 8 initial conversions in 2 days is a good starting point.
Obviously now I need to experiment with “closing”. Here are the steps I took this morning to “adjust” before I recheck on Wednesday-

-removed “browse free videos” button from the info page and moved it to text of 5th chapter (I’ll include screenshots when I get back on my Mac)

There are two possibilities for low conversion. The first is simple bad page design. Maybe by giving people an “out” at the top of the page, they weren’t inspired to read through the content. Maybe because the money back guarantee wasn’t clear, they weren’t ready to commit.

The second possibility is they simply need to see more evidence. When I picture myself making a purchase, I might visit the site multiple times, and establish a baseline “trust” for the seller before deciding “I’ll help this guy out and purchase”. I want to instill that positive feeling, and I think the way to do it is to flesh out the site with more free videos, or maybe “previews” of the chapters in the series.

This will eventually be a professionally-produced video of the highest quality I can make it, with professionally-edited trailers of every facet. I could simply dump $3,000 into it now and write it off my taxes, but I’m doing this partly as an experiment for my musician buddies – to see if I can use the Ferriss model to create a low-initial-investment, low-risk sales vehicle, which means “bootstraping” sales pages (only offering features necessary for sales at first), and attempting to “crowd-fund” production, using the Dane Maxwell model. (google it.)
As before, I’m not posting links here to avoid upsetting my metrics. If I see a click on the “buy it now” page, I want to know it’s really a “sale”, not a Breaking Ferriss reader. Photos coming soon!
N